Tokyo Stock Exchange moves to weed out tiny firms from Topix, start new index

FAN Editor

December 25, 2020

TOKYO (Reuters) – The Tokyo Stock Exchange said on Friday it will gradually remove companies with market capitalisation of less than 10 billion yen ($96.59 million), or about 1 percent of all listed shares, from its main Topix index.

The exchange also said it will start new stock indexes in April 2022 when it will reorganise its market structure, now made up of the massive main board and three smaller sections.

The move came amid criticism that the exchange is allowing many companies with limited growth prospects and weak governance standards to remain listed on the main board, which many argue is holding back gains in the Topix index.

The TSE said it will start reducing the weight of small caps shares in Topix from 2022.

The exchange has said it will re-organise the bourse into three sections – tentatively called prime market, standard market and growth market respectively – in April 2022.

The prime market will have a slightly stricter listing criteria than the current main board but analysts expect a large part of almost 2,200 firms currently listed there will move to the prime market.

The TSE said it plans to introduce new stock indexes and abolish some indexes, including TSE Mothers Index and the second-section index, to reflect the upcoming reclassification.

($1 = 103.53 yen)

(Reporting by Hideyuki Sano; Editing by Shri Navaratnam)

Free America Network Articles

Leave a Reply

Next Post

China issues draft rules on bank units’ sales of wealth management products

FILE PHOTO: A man rides an electric bike past the China Banking and Insurance Regulatory Commission (CBIRC) building in Beijing, China February 14, 2019. REUTERS/Stringer/File Photo December 25, 2020 BEIJING (Reuters) – China’s banking and insurance regulator issued draft guidelines on Friday on sales of wealth management products by commercial […]